The SEC recently issued two new FAQs clarifying certain reporting requirements in Form ADV. Highlights of the FAQs include:
- Item 1.O of Form ADV requires an adviser to indicate whether it had $1 billion or more in total assets on the adviser's balance sheet as of the last day of the adviser's most recent fiscal year end. "Assets" refer to the adviser's total assets, not the assets managed on behalf of clients. Therefore, for example, an adviser that has $5 billion in regulatory assets under management, but only $300 million in total assets on its balance sheet for its most recent fiscal year end would answer "no" to Item 1.O.
- An investment adviser registered with the SEC that files an annual updating amendment reporting that the adviser is not eligible for SEC registration must withdraw from registration within 180 days of its fiscal year end, unless the adviser then is eligible for SEC registration. Therefore, if a firm is registered with the SEC and reports having regulatory assets under management of less than $90 million on its annual updating amendment, but subsequently obtains $90 million or more in regulatory assets under management during the 180 day period, the adviser may amend Form ADV and check Item 2.A(1) to remain SEC-registered.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
